In the deadliest outbreak of sectarian violence since the American-led invasion of Iraq, at least 160 people were killed and 257 injured in Baghdad yesterday.

In a day of strife extreme even by the bloody standards of the country, Sunni insurgents carried out a concerted attack with suicide bombings and mortar rounds on Sadr City, a large Shia slum on the outskirts of the capital which is also the stronghold of the radical cleric, Muqtada al-Sadr. Scores of people were killed by the blasts as panicked residents fled screaming from the streets.

The response was immediate and lethal, with Shia fighters launching a dozen mortar rounds and rockets into the Sunni district of Adhamiya, targeting in particular the Abu Hanifa mosque, the holiest Sunni shrine in Baghdad.

Further outbreaks of fighting erupted between the two communities in the north west of the city, where Sunni gunmen attacked the Shia-controlled health ministry. American helicopter gunships and Iraqi army units were called in during the three-hour firefight, which left an unspecified number dead and wounded.

With internecine killings increasing across the country, yesterday's deaths were a severe blow not only to any hopes of an accommodation between the two communities, but also to the exit strategy being desperately sought from a state in anarchy by the US and Britain.

Relations between the US and the majority Shia community, already under strain after American officials demanded that the Shia premier, Nouri al-Maliki, rein in death squads run by the interior ministry and make concessions to the Sunni opposition, was put under further pressure with a raid carried out on Sadr City by US and Iraqi government forces.

The operation, which preceded the Sunni attack, left four men dead, eight injured and five taken prisoner ­ all militia fighters, according to the Americans. The local people, however, claim that some of those killed and injured were civilians.

The death toll from a series of bombs in Sadr City, a poor Shia area of Baghdad, has reached 202.

An estimated 250 people were wounded in Thursday afternoon's attacks.

Iraqi police released the new figures on Friday as Baghdadis started to bury their dead.

Doctors had said many of the wounded were seriously injured and unlikely to survive.

Thursday was one of the bloodiest days in the country since the US invasion.

After the blasts the Iraqi government imposed an indefinite curfew on Baghdad and appealed for calm.

State-run television said the government had also closed Baghdad International Airport to commercial flights until further notice.

Ports and the airport in the southern Shia city of Basra would close in protest over the attacks, an official said.

Pull out threat

Muqtada al-Sadr, the young cleric whose Jaish al-Mahdi (Mahdi Army) militia dominates Sadr City, told chanting supporters in a Friday sermon that the most prominent religious figure from the Sunni group must issue an edict demanding an end to the killing of Shia Muslims.

One of al-Sadr's political aides in parliament told Reuters it would pull out of the US-backed national unity government and from parliament if Nuri al-Maliki, the Shia prime minister, went ahead with next week's meeting with George Bush, the US president, in Jordan.

Faleh Hasan Shanshal told Reuters: "We have asked al-Maliki to cancel his meeting with Bush as there is no reason to meet the criminal who is behind terrorism in Iraq.

"We will suspend our membership in parliament and the cabinet if he goes ahead."

The attacks

Six bombs, apparently coordinated, and a mortar blast were used in Thursday's attacks which caused widespread damage.

Armed men also attacked the city's health ministry on Thursday and fought security guards in a gun battle, trapping 2,000 employees inside.

Officials said the toll could rise since many of the dead had been reduced to scattered body parts and not been fully counted.

After dark, there was sporadic gunfire in several districts.

One of the blasts went off at a market, a regular target for Sunni fighters in the sectarian conflict that has killed thousands of people in Iraq. The neighbourhood is a stronghold of the Shia cleric Muqtada al-Sadr.

After the attacks, al-Maliki warned of "the dark hand of conspiracy that is shedding the blood of the innocent" and urged restraint, saying those responsible would be caught.

Leading Shia, Sunni and Kurdish politicians made a joint appeal for calm on Iraqi television.

Ministry raid

Interior ministry sources said five people were wounded at the health ministry building, about 5km from Sadr City.